The negotiation of sale of goods which are in another state, for
the purpose of introducing them in the state in which the
negotiation is made, is interstate commerce.
Robbins v. Shelby
County Taxing District, 120 U. S. 489. The
police power of a state cannot obstruct foreign or interstate
Page 227 U. S. 390
commerce beyond the necessity for its exercise, nor can objects
not within its scope be secured under color of the police power at
the expense of the protection afforded by the federal Constitution.
Railroad Co. v. Husen, 95 U. S. 465.
While a tax on peddlers who sell and forthwith deliver goods is
within the police power of the state, a tax on one who travels and
solicits orders for goods to be shipped from without the state is a
burden on interstate commerce, and unconstitutional.
Ement v.
Missouri, 156 U. S. 296,
distinguished.
Peddlers at common law, and under those statutes regulating them
which have been sustained, are such as travel from place to place
selling goods carried with them, and not such as take orders for
delivery of goods to be shipped in the course of commerce.
This Court, in dealing with rights created and conserved by the
federal Constitution looks to the substance of things, and not the
names by which they are labeled.
A state cannot, by defining a business subject to its own police
power as including a class which is not subject to that power,
deprive such class of rights protected by the federal
Constitution.
A state statute imposing a license on those who solicit orders,
from samples which they do not sell, of articles to be shipped from
another state and which are afterwards delivered to the purchaser
by the manufacturer is an unconstitutional burden on interstate
commerce beyond the police power of the state, and cannot be
justified as a license tax on peddlers even though the state
statute defines the persons soliciting the orders as peddlers, and
so
held as to the law of Arkansas of April 1, 1909,
regulating the sale of certain specified articles within the
state.
95 Ark. 464 reversed.
The facts, which involve the constitutionality under the
commerce clause of the federal Constitution of a law of the State
of Arkansas imposing a license on persons making sales within that
state as applied to articles delivered from other states, are
stated in the opinion.
Page 227 U. S. 392
MR. JUSTICE Day delivered the opinion of the Court.
The plaintiffs in error were convicted under a law of the State
of Arkansas approved April 1, 1909, undertaking to regulate the
sale of lightning rods, steel stove ranges, clocks, pumps, and
vehicles in the several counties of the state. The judgment of
conviction was affirmed, 95 Ark. 464, and the case is here upon
questions arising under the federal Constitution.
Page 227 U. S. 393
The act provides:
"Section 1. That hereafter, before any person, either as owner,
manufacturer, or agent, shall travel over and through any county
and peddle or sell any lightning rod, steel stove range, clock,
pump, buggy, carriage, or other vehicle, or either of said
articles, he shall procure a license, as hereinafter provided, from
the county clerk of such county, authorizing such person to conduct
such business."
"Section 2. That before any person shall travel over or through
any county and peddle or sell any of the articles mentioned above,
he shall pay into the county treasury of such county the sum of two
hundred ($200) dollars, taking the receipt of the treasurer
therefor, which receipt shall state for what purpose the money was
paid. The county clerk of such county, upon the presentation of
such receipt, shall take up the same, and issue to such person a
certificate or license, authorizing such person to travel over such
county and sell such articles or article for a period of one year
from the first day of January preceding the date of such
license."
"Section 3. Any person who shall travel over or through any
county in this state and peddle or sell, or offer to peddle or
sell, any of the above enumerated articles without first procuring
the license herein provided for shall be deemed guilty of a
misdemeanor, and upon conviction shall be fined in any sum not less
than two hundred ($200) dollars nor more than five hundred ($500)
dollars."
"Section 4. That any person who shall travel over or through any
county in this state, and peddle or sell any of the articles
mentioned above, shall be deemed and held to be a peddler, under
the provisions of this act."
The case was considered upon an agreed statement of facts, of
which the following is an abridgment:
The Range Company, a corporation organized under the laws of
Missouri, with its principal offices and factory
Page 227 U. S. 394
at St. Louis, manufactures ranges which are sold by traveling
salesmen in the United States, and, among other places, in the
counties of Arkansas. The business is conducted in Union and other
counties in Arkansas as follows: R. L. Sutton, an employee of the
Range Company, and division superintendent, has general supervision
of the company's business in that district, with four other
employees, two known as sample men or salesmen and two as delivery
men, under his direction. The employees are paid stipulated
compensation for their services, and none of them has any financial
or monetary interest in the property of the company in Union
county, or in the sales or proceeds of sales made by them in that
county or elsewhere in Arkansas, other than the compensation above
referred to. The salesmen are furnished with a sample range and a
wagon and team, and are sent into such territory in Union or other
counties of Arkansas as may be designated by Sutton, to solicit
orders for ranges. Where orders are taken, the purchaser signs a
note providing for the payment of the purchase price. The note or
order contains a stipulation that it shall be void as against the
purchaser in the event the company fails to deliver the range
ordered within sixty days from date. All orders so taken are
forwarded to Sutton, who investigates the credit of the purchasers,
and, if found satisfactory, proceeds to have the orders filled
within the sixty days' limit. Deliveries are made through or by the
employees of the company known as delivery men, each of whom is
furnished with a delivery wagon and team by the company for that
purpose. The ranges, wagons, and teams are the property of the
company. The sample ranges entrusted to the salesmen by the company
are not sold by them. Under no circumstances do the salesmen
deliver to the purchasers the ranges for which orders are taken;
under no circumstances do the delivery men sell or offer to sell or
take orders for ranges, or deliver any ranges other than those
Page 227 U. S. 395
for which orders have previously been taken by the salesmen. All
ranges ordered and manufactured are shipped in carload lots to
Union and other counties, each car containing sixty separate
ranges, and being consigned by the company to itself, in care of
Sutton, its employee. At the end of each month, Sutton settles with
the company's employees, salesmen, and delivery men, and sends
their reports and his own report to the company, together with all
notes taken by the salesmen during the month, and all cash in hand
over $500, which amount is retained as expense money.
A carload of ranges was thus shipped from St. Louis to Eldorado,
Arkansas, for the purpose of filling orders previously secured by
the soliciting agents or traveling salesmen. Upon the arrival of
the car at El Dorado, the ranges were taken therefrom, loaded on
delivery wagons, and delivered by the delivery men to purchasers in
the precise shape, form, condition, and packages in which they were
delivered to the common carrier at St. Louis.
It was agreed that Gannaway was a salesman of the Range Company,
and had exhibited sample ranges and solicited and taken orders and
secured notes for them, and that Crenshaw acted as a delivery man
and delivered ranges to parties in Union county, who had previously
given orders to salesmen.
This law is attacked, and the conviction of Crenshaw and
Gannaway alleged to be unlawful, because, among other reasons, the
law imposes a direct burden upon interstate commerce, exclusively
within federal control, and therefore beyond the power of the state
to regulate. Under the facts which we have stated and upon which
the court below decided the case, we think the law applicable to
the present situation is well settled by previous decisions of this
Court.
The leading case is
Robbins v. Taxing District,
120 U. S. 489, in
which it was undertaken in the
Page 227 U. S. 396
State of Tennessee to impose by statute a license tax upon
drummers and persons not having a regular licensed house of
business in the taxing district, offering to sell or selling goods,
wares, or merchandise by sample. Robbins was a resident of
Cincinnati, Ohio, and was convicted of having offered for sale
articles of merchandise belonging to a firm in Cincinnati, to be
shipped into Tennessee, without having secured the license required
by statute. In that case, while this Court recognized the power of
the state to pass inspection laws to secure the due quality and
measure of products and commodities, and laws to regulate or
restrict the sale of articles deemed injurious to the health or
morals, the principle was laid down that
"the negotiation of sales of goods which are in another state,
for the purpose of introducing them into the state in which the
negotiation is made, is interstate commerce,"
and it was held beyond the power of the state to impose a
license tax upon the privilege of conducting such business. That
case has been strictly adhered to in this Court since its decision,
and it is only necessary to notice a few of the many cases in which
it has been applied.
In
Brennan v. Titusville, 153 U.
S. 289, an ordinance of the State of Pennsylvania was
held invalid as imposing a tax on interstate commerce, where the
tax was sought to be imposed upon a manufacturer of pictures
residing in Chicago, having his factory and place of business
there, whose agents solicited orders in Pennsylvania and other
states by going personally from house to house with samples of
pictures and frames. Upon the receipt of the orders, they were
forwarded to Chicago, where the goods were made, and whence they
were shipped to the purchasers in Pennsylvania and elsewhere. This
Court reviewed the previous cases at length, and, in the course of
the discussion, said (p.
153 U. S.
302):
"Even if it be that we are concluded by the opinion of the
supreme court of the state that this ordinance was
Page 227 U. S. 397
enacted in the exercise of the police power, we are still
confronted with the difficult question as to how far an act held to
be a police regulation, but which in fact affects interstate
commerce, can be sustained. It is undoubtedly true that there are
many police regulations which do affect interstate commerce, but
which have been and will be sustained as clearly within the power
of the state; but we think it must be considered, in view of a long
line of decisions, that it is settled that nothing which is a
direct burden upon interstate commerce can be imposed by the state
without the assent of Congress, and that the silence of Congress in
respect to any matter of interstate commerce is equivalent to a
declaration on its part that it should be absolutely free."
In
Caldwell v. North Carolina, 187 U.
S. 622, a taxing ordinance of the City of Greensboro was
held invalid as an unlawful interference with interstate commerce,
where a portrait company engaged in making pictures and frames in
Chicago sold them upon orders solicited in North Carolina, shipping
the pictures and frames in separate packages to its own agent, who
placed the pictures in their proper frames and delivered them to
the persons ordering them. This was held to be a transaction in
interstate commerce, and beyond the taxing power of the state, and
it was held to make no difference that the pictures and frames were
shipped to the company itself at Greensboro, where the agent of the
company received them from the railroad at its depot, carried them
to his room in Greensboro, opened the packages, took out and
assorted them, and put them together, and in this form delivered
them to the purchasers in the City of Greensboro, who had
previously ordered them. Of this feature of the case, which had
been held in the Supreme Court of North Carolina to differentiate
the case from the former cases, this Court said (p.
187 U. S.
632):
"Nor does the fact that these articles were not shipped
Page 227 U. S. 398
separately and directly to each individual purchaser, but were
sent to an agent of the vendor at Greensboro, who delivered them to
the purchasers, deprive the transaction of its character as
interstate commerce. It was only that the vendor used two instead
of one agency in the delivery. It would seem evident that, if the
vendor had sent the articles by an express company, which should
collect on delivery, such a mode of delivery would not have
subjected the transaction to state taxation."
In
Rearick v. Pennsylvania, 203 U.
S. 507, an ordinance of the Borough of Sunbury, in the
State of Pennsylvania, was held invalid which undertook to make it
unlawful to solicit on the streets or by traveling from house to
house, orders for the sale or delivery at retail, of foreign or
domestic goods not of the parties' own manufacture or production,
without a license, for which a fee was charged. It was undertaken
in that case to apply the ordinance to Rearick, who solicited
orders for brooms which were shipped from Columbus, Ohio, to fill
the orders solicited, the brooms being tagged and marked according
to the number ordered, and tied together in bundles of about a
dozen for shipment. It was held that the brooms were specifically
appropriated to the keeping of contracts the fulfilling of which
required the transportation of the brooms for delivery in
interstate commerce.
In
Dozier v. Alabama, 218 U. S. 124,
where pictures were sold to be transported and delivered in
interstate commerce, and at the time they were ordered an option
was taken, fixing the specific price of a frame in which the
picture was to be delivered, both picture and frame being
manufactured in another state, and to remain the property of the
vendor until sold, the sale of the frame was held to be part of a
transaction protected by the commerce clause of the Constitution,
although the purchasers were not bound to take the frames unless
they saw fit. Applying the previous cases, this Court held the
license tax for
Page 227 U. S. 399
soliciting orders for the pictures and frames could not be
applied to persons taking such orders to be fulfilled by shipments
from another state, which constituted interstate commerce, and
which could not be taxed under the law of the state.
Nor does the fact that the law now in question was alleged to
have been passed in the exercise of the police power of the state
make it lawful. In
Railroad Co. v. Husen, 95 U. S.
465,
95 U. S. 473,
this Court said that
"the police power of a state cannot obstruct foreign commerce or
interstate commerce beyond the necessity for its exercise, and
under color of it objects not within its scope cannot be secured at
the expense of the protection afforded by the federal
Constitution."
To the same effect,
Walling v. Michigan, 116 U.
S. 446,
116 U. S. 460;
Leisy v. Hardin, 135 U. S. 100,
135 U. S. 108;
Brennan v. Titusville, 153 U. S. 302,
153 U. S.
303.
In the opinion delivered for the majority of the Supreme Court
of Arkansas, the law in question was upheld, notwithstanding the
decisions of this Court, which were recognized, because of the
distinguishing feature of the ordinance as a valid exercise of the
police power of the state in taxing the occupation of peddling, and
to sustain that conclusion,
Ement v. Missouri,
156 U. S. 296, was
relied upon. In that case, a tax upon peddlers within the State of
Missouri by a statute of the state by which peddlers of goods,
going from place to place in the state, were required to take out a
license, was sustained. The cases were fully considered by Mr.
Justice Gray, who delivered the opinion of the Court, and the right
to tax peddlers from early times in England and America was stated,
and a history of much of the legislation given. The law was
sustained as against the contention that it violated the interstate
commerce clause of the Constitution, because it was shown that
Ement, who was convicted, carried the machines with him in a wagon,
and upon making
Page 227 U. S. 400
a sale delivered the machine to the purchaser. He was not merely
soliciting orders for machines, but selling and delivering them.
Upon this ground, the Supreme Court of Missouri and this Court
placed its decision (p.
156 U. S.
310), and Mr. Justice Gray said (p.
156 U. S.
311):
"The defendant's occupation was offering for sale and selling
sewing machines by going from place to place in the State of
Missouri in a wagon, without a license. There is nothing in the
case to show that he ever offered for sale any machine that he did
not have with him at the time. His dealings were neither
accompanied nor followed by any transfer of goods, or of any order
for their transfer, from one state to another, and were neither
interstate commerce in themselves nor were they in any way directly
connected with such commerce."
In the
Ement case, therefore, there was no movement of
goods in interstate commerce because of orders taken for their
sale, but the specific articles carried about by the peddler, and
none other, were sold and delivered by him. In the majority opinion
of the Supreme Court of Arkansas, the definition of hawkers and
peddlers, as understood at common law, was recognized as one who
goes from house to house or place to place, carrying his
merchandise with him, which he concurrently sells and delivers, 2
Bouvier 642, but it was said that the Legislature of Arkansas might
define the word "peddlers" so as to include such as traveled from
place to place and took orders for goods from other states, and
that such persons, because of the statute declaring them so, were
peddlers, and liable to be taxed under the lawful exercise of the
police power of the state. We must look, however, to the substance
of things, not the names by which they are labeled, particularly in
dealing with rights created and conserved by the federal
Constitution, and finding their ultimate protection in the
decisions of this Court. At common law and under the statutes which
have been sustained concerning peddlers,
Page 227 U. S. 401
they are such as travel from place to place, selling the goods
carried about with them, not such as take orders for the delivery
of goods to be shipped in the course of commerce. Here, as the
facts show, the sample ranges carried about from place to place are
not sold. Orders are taken and transmitted to the manufacturer in
another state for ranges to be delivered in fulfillment of such
orders, which are in fact shipped in interstate commerce and
delivered to the persons who ordered them. Business of this
character, as well settled by the decisions of this Court,
constitutes interstate commerce, and the privilege of doing it
cannot be taxed by the state.
It follows that the judgments of the Supreme Court of Arkansas
must be reversed and the cases remanded to that court for further
proceedings not inconsistent with this opinion.
Reversed.